Item 8.01. Other Events.
In connection with a proposed underwritten public offering of 3,250,000 shares
of Class A common stock, i3 Verticals, Inc. (the "Company," "we" and "our")
provided potential investors with the following additional disclosures
concerning recent developments in its acquisition activity, weekly payment
volumes and software and related services revenue:
Recent Developments
Recent Acquisition Activity
A core component of our growth strategy includes a disciplined approach to
acquisitions of companies and technology, evidenced by numerous platform
acquisitions and tuck-in acquisitions since our inception in 2012. Our
acquisitions have opened new strategic vertical markets, expanded our offerings
in existing vertical markets, increased the number of businesses and
organizations to whom we provide solutions and augmented our existing payment
and software solutions and capabilities.
During the nine months ended June 30, 2020, we continued to actively pursue our
acquisition strategy, though we did not complete any acquisitions during this
period. This was primarily the result of the uncertainty from the COVID-19
pandemic and our desire to maintain liquidity and monitor the impact of the
pandemic. Subsequent to June 30, 2020, we have completed the acquisition of
three businesses, with two expanding our geographic reach and software
capabilities in the public sector vertical and the other adding text-to-pay
capabilities and other software solutions in our non-profit vertical. Total
purchase consideration for these three completed acquisitions was $27.5 million,
funded with cash and revolving line of credit proceeds, and an amount of
contingent consideration, which is still being valued. In connection with these
three acquisitions, we also granted an aggregate of approximately 100,000 stock
options under our 2018 Equity Incentive Plan to certain key employees of the
acquired companies. In addition, we currently have finalized separate
non-binding term sheets for four acquisitions with an aggregate purchase price
of approximately $50-60 million and an amount of contingent consideration. If
completed, we would also expect to grant approximately 250,000-450,000 stock
options to certain key employees of the acquired businesses under our newly
adopted 2020 Acquisition Equity Incentive Plan, as described below. Each of the
term sheets relate to an acquisition in one of our existing vertical markets.
Assuming satisfactory completion of our due diligence review and negotiation and
execution of definitive agreements, we would expect these four acquisitions to
close in the fourth fiscal quarter of 2020 or the first fiscal quarter of 2021.
Our negotiations for these potential acquisitions are ongoing and there is no
assurance that we will be able to successfully negotiate and execute the
definitive documents for or consummate any of these acquisitions.
2020 Acquisition Equity Incentive Plan
In connection with our acquisitions and as discussed above, we have historically
granted stock options to certain key employees of the acquired companies to
induce them to join us subsequent to an acquisition and to align their interests
with those of our stockholders. In order to help facilitate this practice, on
September 8, 2020, the Board of Directors of the Company, upon recommendation of
the Compensation Committee, adopted the i3 Verticals, Inc. 2020 Acquisition
Equity Incentive Plan (the "Acquisition Plan") and reserved 1.5 million shares
of the Company's Class A common stock to be used exclusively for grants of
awards to individuals that were not previously employees of the Company or its
subsidiaries in connection with acquisitions, as a material inducement to the
individual's entry into employment with the Company or its subsidiaries within
the meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules. Under the
Acquisition Plan, the Company may grant these eligible recipients stock options,
stock appreciation rights, restricted stock awards, restricted stock unit
awards, performance awards, and other stock-based awards. The Board of Directors
also adopted a form of stock option agreement and form of restricted stock
agreement (the "Form Agreements") for use with the Acquisition Plan.
It is our current expectation that the shares reserved under the Acquisition
Plan will be sufficient to meet our grant needs in connection with acquisitions
for at least the next twelve months, but the actual number will

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depend on the acquisitions consummated and the employees of those acquired
companies who become employees of the Company.
The foregoing description of the Acquisition Plan and Form Agreements is not
complete and is qualified in its entirety by reference to the text of the
Acquisition Plan and Related Agreements, which are filed as Exhibits 10.1, 10.2
and 10.3, respectively, to this Current Report on Form 8-K.
Payment Volumes
The COVID-19 pandemic is significantly affecting overall economic conditions in
the United States. The economic impact of these conditions is materially
impacting our business and is expected to continue to adversely impact our
strategic verticals and our business in general. For example, beginning in the
second half of March 2020 and continuing into the third quarter of fiscal 2020,
we and our clients have experienced a decline and subsequent partial recovery in
payment volume and the number of transactions processed, and therefore, a
decline and subsequent partial recovery in revenue in our strategic verticals.
However, as the table below demonstrates, our average daily payment volume has
recovered 82% from the COVID-19 lows we experienced during the week of March 28,
2020. The impact of the COVID-19 pandemic is fluid and continues to evolve, and
therefore, we cannot currently predict with certainty the extent to which our
business, results of operations, financial condition or liquidity will
ultimately be impacted.
Consolidated average daily payments volume(1) ($ in millions)
                    [[Image Removed: iiiv-20200909_g2.jpg]]

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1.This includes credit and debit card volume from our processing portfolios for
which daily volume figures are readily available. The volume of portfolios for
which daily volume figures are unavailable and any volume for which we receive
residual payments but do not control the merchant relationship are not included.
Average daily volume above represents approximately 85% of the credit and debit
volume we reported, or we expect to report in our consolidated financial
statements.

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Software and Related Services Revenue
For the months ended July 31, 2020 and August 31, 2020, we estimate we had $2.9
million and $3.2 million, respectively, in software and related services
revenue. Software and related services includes the sale of licenses,
subscriptions, installation services, and ongoing support specific to software.
While we currently expect that our final results will be consistent with the
preliminary estimates set forth above, we note they are preliminary and have not
been audited or reviewed and are thus inherently uncertain and subject to change
as we complete our financial closing and review procedures for the three months
and year ended September 30, 2020.
Software and Related Services Revenue Trends(1) (Monthly Adjusted Net Revenue -
$ in millions)
                    [[Image Removed: iiiv-20200909_g3.jpg]]

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1.Software and related services includes the sale of licenses, subscriptions,
installation services, and ongoing support specific to software.
2.Preliminary estimates for the months ended July 31, and August 31, 2020,
respectively.
Forward-Looking Statements
This document contains forward-looking statements that are subject to risks and
uncertainties. All statements other than statements of historical fact or
relating to present facts or current conditions included in this release are
forward-looking statements, including any statements regarding guidance and
statements of a general economic or industry specific nature. Forward-looking
statements give the Company's current expectations and projections relating to
its financial condition, results of operations, guidance, plans, objectives,
future performance and business. You generally can identify forward-looking
statements by the fact that they do not relate strictly to historical or current
facts. These statements may include words such as "anticipate," "estimate,"
"expect," "project," "plan," "intend," "believe," "may," "will," "should,"
"could," "likely" and other words and terms of similar meaning in connection
with any discussion of the timing or nature of future operating or financial
performance or other events. Forward-looking statements are not guarantees of
future performance, and the Company's actual results could differ materially
from the expectations expressed or implied in any forward-looking statements.
You should not put undue reliance on them. Examples of forward-looking
statements contained in this document include statements about the Company's
expected timeline for certain acquisitions. Actual results may differ from those
contained in any forward-looking statements made in this release for a variety
of reasons, including those described in "Risk Factors" and "Note Regarding
Forward-looking Statements" in the Company's Annual Report on Form 10-K for the
year ended September 30, 2019, and in its subsequent periodic reports.

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Item 9.01.  Financial Statements and Exhibits.
(d) Exhibits.

     Exhibit No.                                           Description
         10.1                  i3 Verticals, Inc. 2020 Acquisition Equity Incentive Plan.
                               Form of Restricted Stock Award Agreement under i3 Verticals, Inc. 2020

         10.2                Acquisition Equity Incentive Plan.
                               Form of Stock Option Award Agreement under 2020 Acquisition Equity
         10.3                Incentive Plan.
                             Cover Page Interactive Data File (embedded within the Inline XBRL
         104                 document).

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